Government and Business

The Role of Industry/Trade Associations

Businesses have a multitude of organizations and associations at their disposal to help with networking, awareness, and marketing. In this lesson, you’ll learn more about the chamber of commerce and industry and trade association.

Know Your Role

If you own a business, you know there are many organizations that can help advance your ideas, extend your network, and help promote your products and services. Understanding the organizations will save you valuable time and energy.

Let’s pretend you’re own a small store in a Street in your hometown. You’re looking to find other like-minded business owners and figure out the best ways to reach new audiences. Do you want to look at a chamber of commerce or a trade association? How about both?

In this lesson, you’ll learn more about these two important business organizations and their role and function for business owners.

What is a Chamber of Commerce?

The first thing to remember about a chamber of commerceis that it’s local: focused on a local community and focused on local businesses.
Overall, a chamber is an association of business leaders that allows mutual promotion and protection of the interests of their businesses, whether that be a small restaurant or a used bookstore.
These are frequently seen in individual towns and communities, but there are also state and national chapters that can be accessed.
A good chamber of commerce helps businesses band together and come up with ways to better market their products and services.
They form a collective to address important concerns and issues for the business community.

As a business, joining a chamber of commerce can be a good choice for several reasons:

Increased exposure
Networking opportunities
Better understanding of business community concerns
More credibility
Increased marketing potential
Stronger voice in local decision-making

What is an Industry and Trade Association?

More specific than a chamber of commerce, industry and trade associations narrow the focus from all businesses to specific ones. For example, you may find yourself part of an industry association specifically geared toward owners of beauty supply stores or auto parts manufacturers.
A trade association, or trade group, is put together by businesses operating in specific industry areas. Like a chamber of commerce, these associations provide a place for business leaders to advertise, educate, market, and lobby the government; they provide a collaborative environment for like-minded professionals.
Some associations put a stronger focus on conferences, trade shows, networking events, and fundraisers, as well as continuing education opportunities for its membership.

Other benefits of joining an industry or trade association include:

Access to specific knowledge about your industry
Building an industry-specific network
Increasing your reputation in your industry
Gaining access to trade group discounts in purchasing you a stud

Definition of Trade Associations

“A trade association is a voluntary organization of independent business units in the same branch of industry, which conducts co-operatively activities aimed at improving the welfare of the group, which does not deprive its members of the power to make essential managerial decisions.”

Trade associations are formed by businesses which are engaged in same or similar trade. They are organized on a non-profit basis. Trade associations are formed for the protection and promotion of business interests of its members.

The meetings of the trade associations generally discuss issues relating to the common interest of the members.

Issues may relate to:

Taxation (tax rates and taxation procedures)
Raw material prices or shortages,
Infrastructural issues (roads, power, telecom, ports etc.)
Labour issues and labour legislation
Legislation affecting the interests of the members
Unfair competition.
Import and export issues
Emerging opportunities in business, trade and commerce.

Features of Trade associations

Voluntary association: It is a voluntary association of member units. Members are free to exit at any time.
Non-profit motive: Trade associations are non-profit earning associations. They are not promoted with a commercial motive.
Name: The associations are generally named after the nature of the trade or industry conducted by its members.
Identity: Members continue to retain their individual identity
Independence: Members units can remain completely independent. There is no interference by the association on the business affairs of its members.
Objective: The objective of trade associations is to promote the business interests of the members, exchange views, serve as a platform for discussions and to represent the interests of its members.

Functions of Trade associations

The main functions of a trade association are:

Educating members to improve efficiency.
Preventing cut-throat or unfair competition.
Promoting and extending trade through ‘legislative work’.

The following are the other functions of trade associations:

To provide market information to members with regard to customer preferences, expectations, market opportunities etc.
Providing information relating to emerging business opportunities.
Rendering advice on technical matters and legal issues.
To secure co-operation and co-ordination among members.
To serve as a forum where members can settle their disputes.
Ensuring that members do not indulge in unfair trade practices.
Providing references with regard to the reputation and credit worthiness of members.
Undertaking advertisements to promote the industry.
To prescribe code of ethics with a view to promote ethical behaviour.
To represent members grievances to the government and seek redressal.
Conduct seminars or workshops on new legislation, the budget, international business developments etc.,
To conduct market research and provide information to member.
To send representatives to serve on various committees and boards set up by the government.

Advantages of Trade associations/How they influence Government

The following are the advantages of trade associations:

It protects and promotes the interests of its members. It can take up issues relating to the respective authorities for redressal and corrective action. For e.g. it can take up issues such as: insufficient infrastructural facilities, high inputs costs, problem of cheap imports which affects the survival of local firms with the government and request it to take suitable remedial measures.
The association serves as a forum for members to interact with each other. Members can discuss key issues, share knowledge about industry trends, consumer preferences, best practices followed etc. This kind of knowledge sharing enables companies to implement appropriate measures and achieve efficiency and profitability.
Trade associations can undertake research and development to innovate new products, processes etc. Individual firms face resource constraints in undertaking research and any new innovation would benefit that individual firm. But the fruits of the research and development efforts of trade associations would benefit all the members.
Trade associations can engage market research agencies such as IMRB, ORG-MARG, etc. to conduct market research on consumer preferences and expectations. They can sponsor delegations of members to foreign countries to find out the market potential.
They play an important role in settling conflicts and disputes among members. They can use the services of members who enjoy a good reputation to settle disputes between members. This saves the members from expensive litigation which might also take up a lot of members’ time.
Trade associations prevent members from indulging in unfair trade practices. They ensure that members do not engage in cut-throat competition and promote the orderly development of the industry.

Here is the link to all major business associations in India:

http://www.indianmirror.com/indian-industries/associations/association.html

Here is the link to various trade associations across India and major companies:

https://in.kompass.com/a/trade-associations/87520/

Here are a few of very effective business associations, with their web links:

1Confederation of Indian Industry (CII)

Business association with 6,000 member organisations from the private as well as public sectors, including SMEs & MNCs; based in New Delhi (has 56 offices in India & eight overseas); web site has information on various industry sectors, events etc

The Role of Industry/Trade Associations

Know Your Role

What is a Chamber of Commerce?

What is an Industry and Trade Association?

D. Trade Associations & Business Organisations India